Section 7 insolvency admission turns on proven debt and default; SARFAESI findings do not control the inquiry.

An application under section 7 of the Insolvency and Bankruptcy Code was maintainable because the financial debt was admitted and supported by the repayment record, restructuring schedule and information utility report; the objection that the date of default was misstated did not displace the evidence that the debt had become due and remained unpaid. Findings in SARFAESI proceedings, including setting aside of the demand notice, were irrelevant to the separate section 7 inquiry, which is limited to the existence of debt and default. On that basis, the corporate debtor was admitted to corporate insolvency resolution process.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable on proof of debt and default, notwithstanding the objections based on the SARFAESI proceedings and the date of default.

Analysis: The application was founded on a financial debt admitted by the corporate debtor and supported by the repayment record, restructuring schedule, and information utility report. The objection that the date of default was wrongly stated did not dislodge the material showing that the debt had become due and remained unpaid. Findings rendered in the SARFAESI proceedings, including the setting aside of the demand notice, were treated as irrelevant to the distinct inquiry under section 7, which is confined to whether a debt is due and whether default has occurred. The order also records that, for admission under section 7, the adjudicating authority is required to examine only the existence of debt and default.

Conclusion: The application under section 7 was maintainable and the corporate debtor was liable to be admitted into corporate insolvency resolution process.

Ratio Decidendi: In proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016, the adjudicating authority is concerned only with the existence of a due financial debt and occurrence of default, and prior SARFAESI findings do not bar admission where debt and default are established.

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